Repairs scandal to cost Capital £30 million

No bills are being paid while the investigation is ongoing

TAXPAYERS have been left with a bill of more than £30 million as a result of the city’s property repairs scandal, the Evening News can reveal.

The money has been paid out to contractors for statutory notice repair work over the past five years – but the council is yet to see a penny back in the council coffers.

And city council bosses have admitted they do not know how much of the cash will ever be recouped.

The multi-million pound black hole has built up as cash has been paid to contractors, but bills have not been sent to homeowners.

Today’s revelation comes days after the Evening News revealed how five workers had been sacked from their posts in the property department as part of the ongoing investigation into the scandal.

The £30m figure does not include millions missing from the pot because bills have been disputed, cash paid out for scaffolding that has sat unused across the city as the ongoing investigations continue and bills that were written off after lying unpaid for five years.

Inside sources dubbed the situation a “mess”.

One said: “A huge amount of money – our money – has been paid to contractors, but the bills haven’t been sent out. The bills that have been sent out aren’t getting paid. Who would pay up when all of this is going on?

“A lot of this money has been paid out by the council in the last two or three years when the contracts started going barmy. And unfortunately only a small amount of it is going to be recovered because the council is in too deep, it’s too badly tarnished. They are a total mess.

“Some of these bills will not have been sent out because bosses aren’t confident the project has been done properly, or at all.”

A second inside source said: “Not only is this sum eye-watering, you have to ask how many of these bills will be reduced or scrapped due to the findings of the investigation? Will the council ever be able to recoup the money? Unlikely.”

The source added: “How much compensation is going to be owed to homeowners who have already disputed their bills? Can the council get any of this back? And what about the legal fees they’ll face? The final cost of this whole sorry affair is going to be incredible.”

Many homeowners are steadfastly refusing to pay statutory notice bills until they learn whether or not the work on their properties was completed as proposed and at the correct price.

Further cash has been lost due to a number of write-offs issued over the years, and some unpaid bills are understood to have gone “off the radar” due to staff suspensions, the staff’s heavy workload and a “complicated” invoice system.

MSP Sarah Boyack said the statutory repairs scandal was something that concerned the “whole of Edinburgh”.

She said: “Every person in Edinburgh should be concerned about this. At a time when the council is also showing record levels of debt, this is going to pile massive pressure on day-to-day services. I’m reinforcing the call for progress and a plan of action to deal with this giant administrative mess. It is a terrifying fiasco.”

Labour councillor Ewan Aitken added: “I have been raising concerns about the enormity of this problem since 2007 and it highly worries me that this is not the final debt. It will be far greater.”

The council’s head of services for communities, Mark Turley ,said: “The independent investigation we commissioned from Deloitte uncovered the scale of the outstanding amount.

“The investigation continues into this very serious situation. We will do everything possible to discover exactly what has happened and how, and then deal with that appropriately.”

A spokesman added that the £30m would be managed in the same way as other bad debts at the council. He said that the council could not predict what outstanding amount would remain, and said bills would continue to be sent.

The story so far..

• November 9, 2010: The News reveals several staff at the city council are under investigation over alleged irregularities involving £4.5 million worth of repair contracts.

• April 25, 2011: A leaked report reveals all non-urgent repair notices put on hold and a new system due to be put in place later this year.

• May 11, 2011: The number of people suspended hits 14. Deloitte and Lothian and Borders Police are carrying out independent investigations.

• December 2, 2011: Four people are sacked from the property care section of the property department.

• March 29, 2012: The Evening News reveals a total of five workers have been sacked.

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